At BrickVest, we cut our teeth in commercial real estate (CRE) investment and financing. We have built a range of services to facilitate financing of all sorts of CRE projects, from office and apartment blocks to warehousing centres. The logical step was to expand these services to the wider real assets industry.
But what are real assets?
Real assets are what the real world is built with. In this period of huge growth and change in the real world, real assets are also experiencing huge growth and change. These factors make it a hugely interesting area (in our, perhaps subjective, opinion)!
As we see it, real (or tangible) assets fall into three categories:
· Real estate: includes CRE and residential property, real estate investment trusts and funds
· Infrastructure: constructions that facilitate transport, utilities and telecoms
· Natural resources: includes constructions that facilitate the generation and distribution of energy, timber, agriculture, mining and other such products.
Within these categories, BrickVest’s expertise is in commercial “built” assets. This includes of course CRE, but also transport, telecoms and energy infrastructure – the likes of airports, shipyards, cable networks and wind farms.
Why include real assets in a portfolio?
Real assets can make a very good addition to investment and debt portfolios for several reasons:
· They can provide stable income or cash-flow
· They can provide protection against inflation, because of appreciation in value
· Their value is affected by different things than that of assets traded on the stock market, so they can offer diversification and off-set risk
· Many countries offer tax benefits to individuals or companies financing real asset development.
In a low interest rate world in particular, real assets can offer attractive, risk-adjusted returns, both in terms of income and capital growth potential.
However, there are certain challenges facing real asset managers and developers and those wishing to invest in the sector. These include inadequate technology and transparency, as well as a changing investment landscape (resulting from social change, the rise of e-commerce, etc.).
BrickVest’s digital ecosystem and structured, standardised listings allow project sponsors to offer investors and lenders the ease of access and transparency that is lacking in the market in general. Potential financers can analyse asset level information, comparing projects – safe in the knowledge that the deal sponsors and their projects have been vetted and rated by BrickVest – then kick off communication when they are ready to get involved in a deal.
Image courtesy of Fabricio Macedo.